The latest data from the CME's 'Federal Reserve Watch' just came out, and the entire market exploded— the probability of a 25 basis point rate cut in September surged to 87.8%! This isn't 'possibly cutting'; it's 'basically a done deal,' especially since the probability has doubled from less than 50% just a month ago. The signals behind this are very clear: the floodgates for dollar liquidity are about to open, which is a massive 'money-giving level positive' for the crypto market.

1. Rate cut expectations have skyrocketed: from 'will there be a cut?' to 'how much will it be cut by?'

A month ago, the market was still debating whether the Federal Reserve would cut rates in September. Now, the discussion has shifted to calculating 'how many more cuts can we expect'—this change isn't arbitrary; three major factors have pushed the probability of a rate cut to 87.8%.


  1. Economic data is 'dragging behind': The latest U.S. consumer confidence index and employment data fell short of expectations, and economic growth momentum has noticeably slowed. This gives the Federal Reserve a reason for 'preventive rate cuts'—if they don't ease liquidity soon, the economy might not hold up, after all, 'stabilizing growth' takes precedence over 'fighting inflation.'

  2. Trump's 'strong pressure': Recently, Trump's attacks on the Federal Reserve have intensified, even suggesting the dismissal of Federal Reserve Governor Cook, clearly aiming to pressure the Fed to ease in an election year, creating an illusion of 'economic prosperity' through easing. Under this political intervention, the Fed's independence is weakened, making rate cuts nearly an 'inevitable choice.'

  3. Powell's 'doveish' tone: At the Jackson Hole meeting, Powell specifically mentioned 'risks in the labor market' and 'trade tariffs dragging down the economy.' This translates to 'we are preparing to cut rates.' As the Chairman of the Federal Reserve, this statement serves as a reassurance to the market, directly heightening expectations for rate cuts.


The current market discussion is no longer about 'will there be a cut?' but rather 'will there be another cut in October?' (current expectation probability 43%), and 'how many cuts can we expect next year?'—Morgan Stanley even predicts that the Federal Reserve will cut rates by 25 basis points in both September and December, and then continue to cut every quarter until the end of 2026. This expectation of 'continued easing' is the biggest tailwind for risk assets.

2. What does this mean for the crypto market? History shows that during easing cycles, BTC and ETH are never absent.

Don't think that rate cuts have nothing to do with the crypto market; historical data has made the pattern clear: when dollar liquidity is loose, risk assets like Bitcoin and Ethereum always see the biggest surges.


  • In March 2020, the Federal Reserve initiated unlimited QE, and BTC rose from $3,800 to $69,000, an 18-fold increase.

  • In July 2023, the Federal Reserve paused rate hikes and signaled future cuts, leading BTC to surge from $25,000 to $73,000, nearly doubling.

  • Now, the expectations for rate cuts are clearer than before; an 87.8% probability means 'almost certain cuts.' Funds will naturally rush in to seize opportunities—recently BTC returned to $110,000, and ETH broke through $4,600, all backed by the 'expectation of rate cuts.'


More importantly, this round of easing may be more 'durable': If, as Morgan Stanley predicts, rate cuts last until the end of 2026, the 'liquidity dividend period' for the crypto market will be longer, not just a short-term surge but possibly triggering a 'slow bull market'—after all, continuously flowing easy money has to find a place to appreciate, and BTC's 'digital gold' attribute and ETH's ecological growth attribute will become preferred targets for funds.

3. What should we pay attention to next? Two signals determine how 'high the market will fly.'

Rate cut expectations are now fully priced in, but the market won't rise in a straight line; we need to focus on two key signals:


  1. Regarding the September meeting: If the Federal Reserve not only cuts by 25 basis points but also hints at 'accelerating the pace of cuts,' it would be a 'super positive' signal, and BTC could surge to $120,000, with ETH touching $5,000; if they only cut rates but state 'we'll decide based on future data,' there may be a short-term pullback, but the long-term easing logic remains intact, making pullbacks a buying opportunity.

  2. Speed of capital influx: Recently, $1.6 billion in stablecoins flooded into Binance, and there was a net inflow of $455 million into ETH ETFs in a single day. These are signals of 'early capital positioning.' If stablecoins continue to flow in and ETF funds keep increasing, it indicates that both institutions and retail investors are rushing to buy, leading to a more stable market; if capital suddenly stagnates, we need to be wary of a 'pullback after expectations are fulfilled.'


In summary, the current 87.8% probability of rate cuts has already scripted a 'liquidity frenzy.' For crypto investors, there's no need to struggle with 'whether a bull market will come'; instead, they should seize the opportunity of the 'easing cycle'—after all, such moments of 'the Federal Reserve delivering liquidity' don't come every year, and missing out may mean waiting several more years.


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